View the article online at http://citywire.co.uk/money/article/a571803
BP gains on oil spill settlement; FTSE eases
BP (BP.L) shares hit 13-month high after oil giant reaches $7.8bn settlement with victims of the 2010 Gulf of Mexico oil spill.
Shares in BP (BP.L) hit a 13-month high on Monday after the oil giant reached an estimated $7.8bn out-of-court settlement with victims of the 2010 Gulf of Mexico oil spill, as the FTSE 100 pulled back amid concerns over Greece’s debt swap.
BP – a Citywire Top Stock® – gained 11.5p, or 2.3%, to 508p after rising as high as 512p, its highest since mid-January last year.
The settlement – which covers only claims against BP for damages from individuals affected by the spill – delayed the trial that had been due to start on Monday.
"The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast,’ said Bob Dudley, BP chief executive.
Andrew Whittock, analyst at Liberum Capital, said the deal was ‘undoubtedly good news’, and may bring closer the resolution of the other claims against BP by US authorities. But he added: ‘There is still a significant risk that the trial will proceed in order to apportion blame for the spill.’
Greece debt swap
Meanwhile, the FTSE 100 index of blue-chip shares inched down 0.22%, or 13 points, to 5,898 and the All Share index slipped 0.24%, or seven points, to 3,058. See the FTSE’s performance and the index’s top winners and losers.
The falls came amid doubts over the level of participation by private bondholders in a planned debt swap by Greece, whose advisers were trying to round up non-institutional bondholders, the Financial Times reported.
‘If they fail to even achieve less than 66% participation it increases the probability of a more disorderly default as it would scupper the recent bail out agreement reached by the European authorities,’ said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
‘At the current juncture estimating the potential participation remains highly uncertain.’
The euro weakened 0.1% versus the dollar to $1.318, while stock markets on the continent pulled back. Germany’s DAX index gave up 0.54% to 6,884; France's CAC 40 index dropped 0.36% to 3,489; and the FTSEurofirst 300 index of top European shares faded 0.43% to 1,083.
Mysis takeover talks
Petrofac (PFC.L) was the second biggest gainer on the FTSE 100 after BP, adding 26p to £16.00, after the oil services group reported better-than-expected 2011 profit.
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